We have looked at Common Roots prior, and their business model.
There are definitely some flaws with their system! Unfortunately for all of us, some of the Common Roots group sits on Council, or some other board who has direct influence to Council, mainly the Redevelopment Authority. Who are these individuals? Why is this such a concern? Read on and we'll tell you exactly why.
First the who;
Who else is part of Common roots?
Joe Tompkins from the RDA. The tax bill for Common Roots actually goes to Joe's address, and his wife, Julie, is the president for Common Roots.
We'll let you dig into that one on your own if you don't believe us. But, the facts are all there. Lee Scandinaro, Autumn's husband..... recognizing familiar names?
So now you're wondering, why it's such a big deal for this group, Common Roots, to have such a hand in City Council? We're now going to turn your attention to a zoning hearing that occurred on May 21, 2020. Common Roots was trying to get a variance for a basement fill project, the gist of that isn't relevant. It's some of the Q&A that is rather concerning. The individual speaking on behalf of Common Roots is project manager Doug Lodge. Just in case you question his connection to Common Roots;
The first question, what kind of experience does Common Roots have with rental properties?
Common Roots purchased the property on S. Main St in the fall of 2018.
What is their budget for this project?
If hired, $250,000. With volunteers they're hoping it would be closer to $100,000!
This next bit is just for fun. At their estimate of $100,000, and purchase price of $27,500 (tax map gives this info), they'll have invested $127,500. Not considering yearly taxes and insurance whatsoever. If we guesstimate rents at $550/month by using the median for that area (according to rent-o-meter) it would take almost 5 years to recoup the investment. That is just to break even, if their estimates are accurate. That means no profit whatsoever. That's also assuming all of the units are rented, which currently they can't all be rented because they're under construction. We found a video on their Facebook that indicates one individual does in fact live in this building.
Using Realtor.com they show the taxes for this property are around $2200/year. That's an additional $183/month or approx. $46/unit per month.
Now, what sort of goals do they have for this project?
Having money for the next project. You mean, Common Roots and those involved think it's not ok for landlords to make money to re-invest in additional properties but they are allowed?
"Take care of itself....while it's paying for itself". They don't have any clue that these properties will not take care of themselves for 20 years. You have to maintain them! There's going to be things that come up that will take time, money and attention. What then? Oh wait, let's go back to our cost evaluation from above, shall we? If they don't want to do anything on this for 20 years, and want to generate an income let's see what the rents would be. $127,500 ÷ 20 = $6,375 per year. Then divide that by 12 and you'll get $531.25. Divide by 4 units and you'll have $132.81 per unit per month to just break even.
That's prior to taxes and insurance, and assuming everything goes according to plan. Is that affordable housing? Sure. But we're over 3 years in and have only one unit rented! How long must folks wait for affordable housing? 20 years? Getting donations and grants to do your projects apparently means you don't worry about timelines and what the long haul costs are.
This is not a sustainable business model at its current trajectory.
Now, what is this property even worth? Is this property worth the amount of money invested? Short answer, no. Doug Lodge even recognizes this.
In case you're curious why they were requesting a variance, it's because they had a financial hardship that prevented them from complying with the law. Why do they think they're above the law? Why should they not have to obey the same ordinance that the rest of Meadville does. Others in Meadville are facing hardships too, so why would they request to not follow the same ordinance that is set for all?
In the end, they were not granted their variance. But, it makes you wonder a few things. Why would they get into such a project with no experience, or at least not consult with experienced individuals. Why also would you create a hardship by taking "rentable space" and gutting it? (There were 2 rentable spaces prior to them gutting this project. The full audio of this hearing can be obtained by doing a right to know request to the City).
You might be wondering, why all of this is even relevant when talking about City Council. If the same people who are part of this group are sitting on Council, or "advisors" to Council, or serve on other City ABC's, don't you think they should have more of an idea of budgets and rental basics? Especially when they want to implement a program that could impact their renters too! Unless of course, they selectively exclude them like they intend to do. See comment below from Joe Tompkins;
And, in case you're now curious how much influence Joe Tompkins may or may not have over the current City Council, we supply you with his statement to the prior Council when making his case to be appointed to the RDA.
"pursue a landbank within the City", guess what is now showing up in the City?
Why does it feel like Joe is calling the shots here? Have we found the puppet master?
His idea isn't just land banks, his idea is also rental registration and licensing. Don't believe us? In his own words from a Tribune column;
And yes, he's a landlord and his proposed exclusion would exclude his property from inspections. Convenient;
So once again we ask ourselves, who's really calling the shots here?
City Council, or Joe 2.0?
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